So my apartment in Copenhagen got robbed this afternoon–while I was in it. Dudes broke down the door, walked right past a flat panel TV, and ignored the closed bedroom doors, behind which they would have found a couple of new, easily fence-able laptops. And me.

Having ignored all the pricey and highly portable electronics, guess what they stole?

The living room light fixture.

Let me say that again: the light fixture. I won’t dignify it with the name chandelier. It wasn’t anything special as far as I could tell, but my upstairs neighbors tell me that it was probably a designer number worth about 8,500DKK–that’s around US $1,700.

The thieves stacked up the couches in the living room so they could reach the lamp where it hung from the ceiling, then cut the wires and took it away. Wrapped in my favorite (and only!) overcoat, which is the part that really steams me, since it’s about 30F outside and I have nothing else to wear.

After I got over the surprise, I was in awe at the absurdity of it all. Instead of being frightened (that part set in later), I found there was something strangely funny at the sight of the raw electrical wires hanging from the living room ceiling, with the flat panel TV a foot away.

It just didn’t make sense economically. Who the heck breaks into a house to steal a light fixture? And who goes to that much trouble for it? Shattering the big, heavy front door so that the wood frame was splintered and the locks broken was not quick work. How could lamps be worth that kind of trouble?

But it gets even better: when I called the police, they said the whole neighborhood had been swept by a light-fixture-robbery gang today! In fact, they were so busy with these cases that they would not be able to come to my place to make a report for at least 24 hours. Apparently, there are gangs from Romania and Poland who steal pricey Danish light fixtures to resell outside of Denmark at a hefty profit. Heftier than the profit on a flat-panel TV? So it would seem.

So this got me thinking about other weird things people steal, and I knew in an instant that there must be a website or two devoted to this subject. After all, there are plenty of sites devoted to weird things people try to sell online. I figured theft must be closely related, and was not disappointed. Here are some highlights:

• 27 buttons: Felicidad Noriega, former first lady of Panama, was arrested for stealing the buttons, which she clipped off jackets as she walked through a Burdines department store in Miami; note that she didn’t take the jackets…just the buttons, making the jackets unwearable for anyone else

• handful of communion wafers: grabbed during Mass by a guy who simply tried to walk out, past the dozens of outraged congregants; that ended about as well as you’d expect

• 93 severed ponytails: stolen by a fellow posing as a representative for the Locks of Love charity; his unsavory purposes remain mercifully obscure

• $15,000 worth of breast pumps: stolen by two men; what a pair! Let it be noted that this theft, along with the ones involving buttons and communion wafers, was committed in Florida…Coincidence? You decide.

• a 50lb halibut named Big Mamma: the thief broke into the California Halibut Hatchery, speared the star attraction (as close to a local celebrity as a fish could be), threw her on the grill, and served it to his guests, like some modern-dress version of the Feast of Thyestes; the thief’s attorney said later, “I tell you, it was as if he had barbecued Bambi. People want to put him in the gas chamber.”

What are people willing to pay for, and what are they willing to steal? This ends up being an economic sociological question, because it ties into what people value.  I didn’t even notice the lamp that a group of men broke down a door and risked arrest to steal. I can’t really remember what it looked like. But I’ll always miss my beloved overcoat, which they probably regarded as a rag–no different from a cheap towel or a throw rug, useful only in concealing the real goods.

In memory of Coat: RIP, old friend.

UPDATE!
My neighbor’s estimate of the lamp’s value was waaay low: turns out I was living with an interior design masterpiece and had no clue: the thing was a 1958 Poul Henningson “Artichoke” lamp, valued at 39,000DKK, or about US $8,000. Unbelievable. Had anyone mentioned this to me, I would have a) paid more attention to it, and b) made sure I didn’t leave anything valuable in the house, ever. In fact, I probably would have moved to a place that didn’t contain such a juicy target for thieves. Dang. Hard way to learn the difference between IKEA and “real” Danish modern.

This guest post is the first in what I hope will be a series of contributions by some of my former students from Brown University: people who took my course in Economic Sociology, and who have stayed in touch over the years. It’s always wonderful to hear from former students, and especially so when they find that material from my classes has been helpful in navigating their post-university lives. Since I was always rattling on in lectures about how pragmatic and useful Sociology can be–I was particularly fond of quoting Kurt Lewin, who is credited with saying “there is nothing so practical as a good theory”–it’s great to see how former students have applied sociological theories to make sense of their experiences.

In this entry, we find Galyn Burke–Brown class of ’05, formerly a competitive equestrienne, and now an enthusiastic triathlete–using Foucault and Putnam to shed light on the surging popularity of triathlon competition among American elites. Her analysis of what makes triathlons the “latest and greatest place to network professionally” follows.

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Triathlon is the new Golf: As a young lawyer making a name for himself in the mid-seventies, my father’s superiors told him to “pick up golf” as a way to rise quickly within the firm, and to land lucrative clients. It’s still all about who you know, but if you want to get ahead in business today, don’t hit the putting green, sign up for an Ironman. Why?

Like Golf, Triathlon is cost prohibitive: The average annual income of an Ironman participant is nearly $160,000, while the average golfer makes a measly $100,980 a year, according to Golf.com’s 2009 Survey.

With Ironman entry fees upwards of $500 each (plus the flight and lodging expenses associated with destination racing), a decent bike starting around $3,000 (plus $400 for the shoes, helmet, pedals and accessories), $200 for swim, bike and run gear, and $300/month in coaching and facilities fees; you start to understand the need for that extra $60,000/year.

A $6,800 Trek TT Bike, with Carbon, disk
wheels, which cost upwards of $2,000/set.

Triathletes make better business connections: Like Golf, Triathlon entrances “Type A” personalities, obsessed with winning, even if victory requires continuous practice and focus. Unlike golf, Triathlon also demands incredible pain tolerance and phenomenal endurance. Consequently, “the sport attracts high-income, driven, focused individuals who are able and willing to pay the price in time and money,” says David Samson, Florida Marlins president, and Hawaii Ironman 2006 finisher.

Not only are triathletes more driven, they’re also younger. On average, Ironman triathletes are 35-44, while avid golfers are generally in their early 50’s. Consequently, triathletes are at the peak of their professional careers, while many golfers are contemplating retirement, and thereby less effective in helping you infiltrate the network or company of your choosing.

Triathlon is a better way to schmooze (on a Micro Level): Now that you’ve drawn all of the rich, hard working, high powered individuals into one sport, it is time to make connections. Typically, only four players participate in a round of golf, which takes around 4.5 hours. You likely know at least one or two of the other competitors if you’ve been invited to play in the first place, so you’re left with at best two networking opportunities, which isn’t an efficient way to find the right contact for you.

Most of the Multi-Sport fitness groups in my home town (Marin County, CA), host weekly group rides, averaging thirty to fifty participants. The group usually covers seventy miles in a given ride, thereby providing five hours (plus a group brunch) to make friends, and connections.

The PurplePatch Fitness Weekly
Saturday Group Ride, Marin County, CA

The group usually breaks into smaller packs of evenly matched athletes after a ten mile warm-up. As competitive, Type A folks, multiple members in a given group will eventually ask you how old you are, what team you belong to, and what you do (probably to ascertain how much time you have to train, how long you’ve been serious about the sport, who coaches you, and what if any advantage your bike may provide you).

It is during this hierarchical ranking process that you establish dominance over the somewhat older, not-as-fast man on the really expensive bike. He may be the CEO of a major tech company in Silicon Valley, but that is the professional “Pond” (Frank, 1987) or “Sphere” (Putnam, 1995). Right now, you’re both in the triathlon sphere, where you’re fitter, faster and had a better time at Ironman Canada last year. As Frank noted, it is relative status that creates happiness and satisfaction, and in this pond, your status is higher than his.

So, for the remainder of the ride (and during brunch afterward), he picks your brain about triathlon, and you arrange to have lunch with him at his office next week, a networking win you’d never enjoy if you’d attempted to engage said CEO in the professional Sphere.

Aaron Wallen: ‘World’s Fittest CEO, 2008’
Ironman Challenge, Kona, HI

Triathlon as a character reference: Not only have you now procured a meeting, you’ve already passed the first round of the interview process. The ability to withstand (and even enjoy) suffering is a form of ‘bonding social capital’ (Putnam, 2001) that forges a strong sense of collective identity. It implies a preference for achieving work-like goals in the leisure sphere, which translates seamlessly into a strong, professional recommendation from your new friend, the high powered CEO.

Triathlon is a better way to schmooze (on a Macro Level): There is no other sport in which every race includes Professional, Amateur and “Age Group” triathletes from under ten to over eighty, separated only by “wave” times, which are determined by age and gender. As Bob Babbitt, publisher of Competitor Magazine put it: “I can’t pitch to Barry Bonds or tee off with Tiger Woods, but I can be on the starting line with the top people in triathlon.” Consequently, you can train, compete and network with individuals of all ages and abilities, from around the world.

While the world of triathlon is growing rapidly (223,594 US adults participated in a triathlon in 2007, up from just 83,612 just ten years ago), Triathlon is still a small community, even at the Macro level. With a limited number of Ironman (2.4mi Swim, 112mi Bike, 26.2mi Run), Half Ironman (1.2mi Swim, 56mi Bike, 13.1mi Run), Olympic (.9mi Swim, 26mi Bike, 6.1mi Run) and Sprint (.5mi Swim, 16mi Bike, 2mi Run) distance races, you are assured to become familiar (and even friendly) with similarly matched athletes from across the country, and the world.

Triathlon is a reciprocal Panopticon: Your athletic club affiliations are declared on your uniform, and your age is written on your calf prior to each race (so you can check the legs of everyone you pass and everyone who passes you, to estimate ranking in on your age group during the actual race).

Your relative time and ranking is posted within minutes of completing the race, so all can see where you fall amongst the 2,000 or so athletes who participated that day. Award ceremonies are performed immediately, and results are posted online within 24 hours. You can even look up their participant’s photos!

Basically, Triathlon is a Panopticon (Bentham 1995 [1785]; Foucault 1995 [1977]), in which everyone is given the role of prison guard and prisoner. You can’t hide anything about yourself, but in turn, you know everything about everyone else.

Left: Athlink.com results display an athlete’s age, gender, city, and results for every event completed.

Right: Bentham’s Panopticon: A theoretical prison that allows guards to observe (-opticon) all (pan-) prisoners, who can’t reciprocally tell whether they are being watched.

Conclusion: Triathletes are a self selecting group of affluent, hig hly motivated individuals, who spend countless hours forging bonds through the competitive, grueling, and socially cohesive ritual of endurance athletics. The greater community convenes several times a year to establish relative rank by sex, age, casual, amateur and pro standards. With access to the region, age, gender and past performances of every athlete in this group, Triathletes are “tee’d up” to make local, national and international connections that turn into husbands, wives (38% of Triathletes are now women), employees, employers and friends. In a world where it’s all about whom you know, it doesn’t hurt to know the rich, successful, driven group that is Triathlon.

References

Bentham, Jeremy. 1995 [1785]. Panopticon Letters. Miran Bozovic (Ed.). London: Verso.

Foucault, Michel. 1995 [1977]. Discipline and Punish: The Birth of the Prison. New York: Vintage.

Frank, Robert. 1987. Choosing the Right Pond: Human Behavior and the Quest for Status. New York: Oxford University Press.

Putnam, Robert. 2001. Bowling Alone: The Collapse and Revival of American Community. New York: Simon and Schuster.

This time around, there was prescribed pain medication involved—hooray—but it was of a kind that could kill you if you took too much. So reading and understanding the package directions was actually important. Imagine my surprise to open that package in my hour of need and find that the insert contained pages of directions, but only in German. Not one word in any other language: as if it never occurred to the manufacturer that non-German-speakers might find themselves in Germany, sick and in need of this common pain medication. As if there were no such thing as a tourist, or an immigrant worker. 

So I sat in the bathroom with a dictionary at 3am, barely able to focus my eyes from the pain, trying to figure how to avoid killing myself by accident with the pills that were supposed to bring relief. Obviously, all’s well that ends well: I am not blogging from beyond the grave. But it got me thinking wistfully about the ways in which American drug manufacturers and pharmacies go way out of their way to avoid this sort of situation happening in the US. When I was in California a few weeks after wrestling with the pain meds, I stopped by a CVS and had to smile at images like the one above, of the Asian pharmacist with the caption in Spanish, and this sign—displayed near the prescription drop-off window—explaining to customers how to get help in 21 different languages, including English, Laotian, Polish, Portugese and German! (Please forgive the poor quality of my camera phone shots.)

Now this kind of outreach to non-English-speaking populations obviously doesn’t occur just as a humanitarian gesture: it’s a business decision by firms that want to make money by reaching out to the widest possible customer base. This means eliminating obstacles to the use and purchase of medical products—like language barriers. Despite all the crummy pockets of English-only activism in the US, American firms still want to make money, and that keeps them printing signs and package directions in lots of non-English languages—because they recognize the reality that many people in the United States, whether tourists or immigrants, don’t speak English at all, or don’t speak it well enough to decipher things like dosage directions while in pain in the middle of the night.

The question is: why don’t German firms recognize that? Why don’t they recognize that non-German-speakers within Germany have money to spend, and try reaching out to them—for instance, by making package directions available in other languages? Leaving aside the safety issues—it says something about German culture and its stance on foreigners that potentially dangerous medications are not labeled in any language other than German, or even in pictograms, which are commonly used elsewhere in the world as a language barrier workaround—it seems that German firms are forgoing some profits by making their products hard to use by non-German-speakers.

At root, I believe, this is about culture. Shortly after my arrival in the country, many Germans told me to be prepared for the total absence of American-style service culture. But that was only part of the story: after three years in Germany, what I notice is not just the absence of something like service orientation, but the presence of a cultivated user-unfriendliness, in which making things difficult and exclusionary is very much an explicit goal rather than an unintended consequence.

This is one of the many instances where conventional economic wisdom—all businesses wants to maximize profits—breaks down, and economic sociology can be very helpful. Because it’s not that hard to find places where entities nominally called businesses seem hell-bent on making it difficult for people to buy and use goods and services. The whole culture of capitalism as Americans know it is not universal, even though many US political and economic leaders would have us believe that those norms and values are shared everywhere that business is transacted. If you’ve ever been to a socialist or communist country, you know this already; but it is perhaps more surprising that one finds such substantial deviations from American, customer-oriented norms in countries known as developed capitalist democracies.

Like Germany—where two of my German friends recently got “fired” from their long-time health club because they complained to the owner that her employees were 10-15 minutes late almost every morning at opening time, leaving a crowd of members waiting around for the front doors to open. So instead of apologizing or trying to remedy the situation, the club’s owner told my friends that they were banned from the club henceforth as complainers who “upset the staff” with their unreasonable demands for things like reliable opening hours. Now that’s customer service! (I did find a tiny speck of consolation in this story: I thought that kind of thing only happened to foreigners like me, whose accents and grammatical errors while speaking German gave us away as members of a lower caste.)

Economically, this is just insane: what kind of business owner fires her own customers when they complain about her business failing to live up to its commitments? Wouldn’t it seem easier just to make sure the doors of the club got opened on time, rather than losing the revenue stream from customers of years’ standing? I suppose an economist would say that the club owner was maximizing her utility—whatever that means in this case. The utility of being able to cut off her nose to spite her face? To “win” a power play, but lose money in the process? Certainly, many people are willing to pay dearly for the experience of power and dominance over others. But whenever this sort of thing gets explained in terms of economic theory, I find the term “utility” deeply unsatisfactory: like a giant black box in which economists throw everything that they don’t understand.

Sociology is sort of like dumpster-diving in that black box: that’s where all the interesting stuff can be found. Like the costly, irrational stuff people do in the name of culture and preferences. There are a number of different definitions of culture across the social sciences, but I see it as the broad set of social values, practices, norms, roles and expectations people have because of the setting in which they were raised, or in which they live. Nothing happens without culture, including capitalism. And this is a major insight of economic sociology: there is no one universal capitalism, but numerous local variations, dependent upon culture. (Paging Max Weber—again.) So I come from a world in which the business norm is “the customer is king”—whether or not an individual transaction actually lives up to that ideal, I can call upon it within the US and most people will a) know what I’m talking about, and b) acknowledge that it’s the ideal to which business should aspire.

Go to Germany, however, and both a) and b) would cease to apply: there is no shared cultural agreement that customers are the most important people in a business transaction. That changes everything about the lived experience of economic activity there: things that would be unthinkable in the US can happen in Germany, like the gym owner firing my friends for their service complaints.

This produces a special kind of culture shock, of the specifically economic variety. It’s not something I’ve ever seen described, either in the scholarly literature or the popular press. But I’d venture that it happens to most of us, even when we travel outside our home countries: every time you find yourself in a new country, wondering if you’re supposed to leave a tip, and if so, how much, you’re experiencing a minor form of economic culture shock. But the phenomenon manifests itself in a variety of other ways that are hard to fully appreciate until you move to that new country and start working there, buying groceries, and going to the doctor.

Having shared a few stories about the way that economic culture shock has affected me, I’d be interested to hear from you–what forms have you encountered, and what did you make of those experiences?

Shortly after posting On “Worth,” what to my wondering eyes should appear but this story from the Chicago Tribune: a mostly-first-person account of the experience of a young, white, middle-class couple applying for welfare. The husband is a graduate student, the wife is eight months pregnant, and they are both suddenly out of work.

The interest of the story–from the point of view of this blog–is not their experience (spoiler alert: the public assistance system is way broken), but readers’ responses to their story. The comments following the article represent a brilliant, if unintentional, case study in the rhetoric of justification, and the “social technologies” we use to determine who gets what resources. It’s like the commenters were all feral students of Boltanski and Thévenot, who weighed the possible justifications for going on welfare in this case, and declared the couple “Not Worthy.”

While some of the comments are basically sympathetic to the pair, the vast majority classify them among the “undeserving poor.” As I related in the previous post, the law once condemned such people

…to be whipped through the streets, publicly, until they learned the error of their ways.

In the Series of Tubes era, the public whipping takes place virtually, but with the same old intent to humiliate. Total strangers feel entitled to demand that the couple account for their most minute personal decisions, from their choice of college major (was it sufficiently pragmatic and career-oriented?) to their choice of birth control methods (so foolish of them to get pregnant during a recession).

It quickly becomes clear that the purpose of this questioning is not to learn anything about the conditions that can lead economically stable people into poverty, but to build a case against the couple, so that they can be blamed for their present circumstances. If you can stomach the ghoulish delight that many of the commenters seem to take in hurling retribution at the unfortunate pair, it’s fascinating to watch the ethics of Elizabethan England filtered through a 21st century medium.

So here’s a kind of pop culture pop quiz on worth: try to identify the justifications used by commenters in responding to this story of going on public assistance. Your options are the “orders of worth” known as: civic, market, industrial, domestic, inspiration, and fame. You can check out the exact definitions via Google Books’ link to On Justification.

Ready, set, go!

……………..

Well, here’s what I found: exactly one of the rhetorics of justification in use, that of the “domestic order of worth.” In Boltanski and Thévenot’s taxonomy, this form of justification for action is based on the idea that society is a kind of household writ large—a notion that goes back to Aristotle’s writings on statecraft and the oikos. In this moral order, individuals belong to the collective rather than to themselves, and that imposes a responsibility for mutual care and assistance on the entire group—see Durkheim’s work on suicide rates in Europe for another interesting take on the results of this conception of the world.

The most sympathetic commentators on the Tribune article drew on this ethic of care, which also tends to come with rigid social hierarchies. The flipside of protection of the “weak” is that it is usually used to legitimize the position of those in power–those with the authority and access to resources that make public assistance possible. This logic would have been very familiar to the people of pre-Reformation England, when there was no need for a codified “Poor Law,” because the Catholic Church enforced a moral order (hierarchical and collectivist) which ensured that people in need got at least some assistance. As far as I know, no first-person accounts of being poor in Catholic England have come down to us, so it’s difficult to know what the experience of care was really like. But we can say with some confidence that the provision of assistance to people in poverty was not nearly as controversial then as it is now.

Which leads me to the majority opinion expressed by the commentators: there is no justification for being poor.

I was going to add “and able-bodied” to the end of that sentence, to indicate that being physically disabled was one of the few possible conditions that could get a person classified as “deserving poor,” but then I wondered: how to acknowledge the vitriol unloaded on the 8-months-pregnant female member of the couple? Clearly, pregnancy is not equivalent to a permanent physical disability, but it can make many physical activities temporarily difficult and dangerous. Thus, even the welfare officials won’t demand she go to work.

But the commentators are another story. They interpret her advanced pregnancy not as a condition that makes her at least temporarily deserving of assistance, but as cause to damn her further—evidence that she’s irresponsible and therefore unworthy of any help!

Why? Because she should have known better than to get pregnant…during an economic crisis, while her husband was in graduate school, when the couple didn’t have enough money set aside, etcetera, ad nauseam.

And here, I think, with this rhetoric of “you should have known better than to put yourself at risk,” we find ourselves faced with one of the fundamental contradictions of contemporary capitalism. On the one hand, risk is good. Risk is rewarded. We hail the entrepreuneur and the pioneer for the risks they take. And most Americans see it as “fair” that such risks should be rewarded, financially and otherwise, because risk-taking benefits us all. So there’s the “risk premium” in finance, tax breaks for entrepreneurs, and patents for inventors. That’s all mostly uncontroversial.

But when people take risks and lose, they are vilified as burdens to society—unless they are corporate titans, in which case they get multi-billion dollar bailouts. The socially-accepted posture toward risks that don’t pay off is blame and recrimination.

“Lost your job? You schmuck—a smart guy/gal would have seen that coming/gotten a new position by now.”

“Your business went under? You should have put aside more in the cash reserves/paid your employees less/sold more products that people actually wanted!”

In other words: “You know that bad thing that happened to you? It’s your fault.”

If Max Weber were still with us, he’d probably say that this was all a tragic consequence of the Protestant Ethic: the distortion of Calvinist doctrine that led some Protestants (like the Puritans who settled North America) to believe that God marked the “elect” (those pre-destined for salvation) with worldly good fortune, including material prosperity. Therefore, ill fortune—like losing a job, or a business, or finding oneself in need of public assistance—was interpreted as evidence that one was not among the elect, but instead pre-destined for eternal damnation. Which obviated the need for public assistance—why mess with a fate that God ordained?

It’s probably a safe bet that none of the commentators on the Tribune article are Calvinists. They may not even be Christians. But most of them were probably born and raised in the US, and this is the miracle of socialization: you don’t have to be aware of it in order for it to be effective.

In fact, the less aware you are of your own socialization—all the things you take for granted as “natural” and “normal”—the more effective that socialization is in controlling your thoughts and behavior. No awareness = no resistance. And as Harold Garfinkel’s “breaching experiments” so vividly demonstrated, often we can’t even “prove” that socialization (or social structure) exists unless we purposefully break the rules—the more mundane and trivial the occasion, the better.

But back to the Tribune commentators, the majority of whom seem to believe something along the lines of “bad things only happen to bad people, who are therefore undeserving of any help.” Which is why their comments consist largely of uninformed speculation as to all the things the unfortunate couple probably did to bring their economic woes upon themselves. As if there were no economic crisis, and no such thing as bad luck.

These commentators don’t have to be Calvinists, or literal descendants of the Puritans, in order to espouse their views. All they have to be is well-socialized Americans. As part of the process of historical path-dependency, the beliefs of the nation’s founders have come down to us in the institutions and laws they created, as well as in their customs. Part of what it means to be an American is to resonate with the language of self-determination and independence, whose dark side is detachment from collective responsibility—as we saw in the Bush-era proposals to “privatizing” Social Security, and as we see now in the debate on health care reform.

Societies built on this extreme individualism have a hard time explaining misfortune, loss and failure—which is why we waste so much time blaming the victims and ignoring any systemic factors that may have come into play. Part of this is sheer laziness: it’s easier (and, I fear, more fun, for some) to blame individuals for any problems they may experience in life than to look at social structural problems like the breakdown of informal support systems in the family, or long-standing customs, like those between management and labor over pensions and job security.

What is miraculous, to me, is that the individual-blaming explanations survive even the most blatant examples of systemic breakdown. So the world financial system comes to the brink of collapse, and in the minds of many, it’s still the fault of individuals—like all those people who got home loans they didn’t deserve. It makes me wonder what exactly it would take—what kind of financial/social/environmental apocalypse—for Americans to give up blaming individuals for the misfortunes they experience, and consider that there are some forces that individuals cannot control, and for which no amount of planning provides sufficient protection.

Any ideas? Anybody? Bueller?

This post was inspired by a classic sketch by the 1990s comedy troupe The State:

Awww, yeahh…while whispering sweet nothings,  Barry and LeVon have raised Important Sociological Questions. Such as: what is worth? What does the word actually signify?

For answers, we must turn from Barry and LeVon to Luc and Laurent—Boltanski and Thévenot, that is. In On Justification: An Economics of Worth (Princeton 2006), these French sociologists argue that the concept of worth is a “social technology” used to adjudicate the competing claims to resources, legitimacy, and other goods that characterize social life.

As an example, consider the notion of the “deserving poor,” created in Elizabethan England in order to institutionalize the claims of certain people to public assistance (in the form of education, housing, medical care, money and food), while denying those resources to others (the “undeserving poor”).

Prior to the Reformation, these issues had been sorted out informally by the community. But with Catholic-communitarian morality giving way to a more individualist Protestant ethic (big shout-out to Max Weber here), people apparently stopped trying to save their own souls by doing good works for the poor. Which created a problem: the poor were still around, but they weren’t getting any kind of systematic help.

Enter bureaucracy: in 1563, Parliament began passing a series of laws, culminating in the “Poor Law” of 1601, to provide for the counting, classification, and treatment of poor people. The “worthiness” of these persons, and thus their legitimate access to resources, was defined as follows.

The “deserving poor” included

Those who would work but could not: these were the able-bodied…poor. They were to be given help either through outdoor relief or by being given work in return for a wage.

Those who were too old/ill/young to work: these were the impotent…poor. They were to be looked after in almshouses, hospitals, orphanages or poor houses. Orphans and children of the poor were to be given a trade apprenticeship so that they would have a trade to pursue when they grew up.

The “undeserving poor” were

Those who could work but would not: these were the idle poor. They were to be whipped through the streets, publicly, until they learned the error of their ways.

So the putative “worthiness” of some poor people justified their access to basic survival resources, while the “unworthiness” of others justified allowing them to starve. (Plus ça change, n’est-ce pas?) This is the kind of connection between moral and material worlds that Boltanski and Thévenot are trying to establish.

They argue that societies can be characterized by which standards of evaluation are considered legitimate, “universal” and binding on social actors. These evaluative standards are called “orders of worth” or “economies of worth.”

At any given time, multiple orders can coexist in a society, though they may not enjoy equal persuasive power. By analyzing contemporary French management training documents through the lens of political philosophy (!),

The authors argue that justifications fall into six main logics exemplified by six authors: civic (Rousseau), market (Adam Smith), industrial (Saint-Simon), domestic (Bossuet), inspiration (Augustine), and fame (Hobbes). The authors show how these justifications conflict, as people compete to legitimize their views of a situation.

Which brings us back to Barry and LeVon. Much of their two minute skit, particularly the opening 45 seconds, is devoted to justification:

LeVon: “Now we coulda bought $100 worth of of pudding…”

Barry: “And that woulda been a whole lotta pudding.”

LeVon: “But we had to go all the way, baby…”

Barry: “All the way home.”

LeVon: “With two hundred…”

Barry: “Forty dollars…”

LeVon: “Wortha pudding.”

This sounds just like the Augustinian notion of “inspiration,” which Boltanski and Thévenot define as a legitimation of value based on the “creation of a masterpiece” in a moment of creative genius. In fact, their description of this “order of worth” reads like an academic parody of Barry and LeVon:

…inspiration manifests itself spontaneously, suddenly, in a disorderly fashion, gripping the creator and obliging him to “surpass himself“…It is in the nature of inspiration to pour out, to spring up, to manifest itself in a “flash of genius, ” a “spark,” that will provoke the appearance of an idea, an illumination or unusual intuition that disturbs, bringing in its wake a “confused bubbling up,” a “strange whirlwind.” In this state, one grasps the world by means of impressions and feelings, through an aura of happiness, vertigo, fear and trembling.*

Awww, yeeaaahh. Happiness, vertigo, fear and trembling? “Now that’s the kind of pudding that only $240 can buy!”

_________________________________________

* Boltanski and Thévenot 2006: 163. All italics, unbelievably, in the original.

For about six weeks, from the beginning of June to the middle of July, I didn’t write a word for Economic Sociology, interrupting my steady two-posts-a-month rate.  I wasn’t on vacation, but instead spending a lot of time with German doctors, trying to figure out why I suddenly couldn’t walk, sleep or eat without pain. I was sick, unable to walk a single step without holding onto something for support, and just miserable 24/7. It would have been a drag in any context, but trying to get help in a foreign language, in a country that is not exactly warmly disposed toward foreigners, made the whole situation very difficult.

One of the best parts of the experience, however, was a very small thing that made seeking medical help a lot less stressful: the segregation of the business part of a medical practice (the part that does billing and takes in payments) from the care-giving part. That means when you go to a doctor’s office, everyone from the office staff to the physician’s assistants to the doctors are focused on the same things that you are as a patient: dealing with what ails you. That’s what people in the business school world call “alignment of interests,” and it works very well in terms of minimizing the roadblocks between people in need of care and those who can provide it.

This separation of business from care in medicine also has a surprisingly comforting aspect emotionally, particularly if you’re used to a system in which the business part of medicine is inextricable from the care part. Though they are intertwined, they don’t work very well together. I think this is because, as Viviana Zelizer pointed out years ago in her article “Payments and Social Ties” (1996), the notions of “care” and “payment” are essentially antagonistic.

Probably every American has a story about the ways that the business part of a medical practice obstructed his or her ability to get care. I once knew a woman who, despite being well-insured, was harassed in her hospital bed by a billing department employee demanding to know how she–still groggy and in pain from an operation to save her life–was going to pay for her treatment; the hospital employee strongly implied that the woman would be “evicted” from her bed if she couldn’t prove that her bills would be paid. That apparently seemed like reasonable behavior to the hospital employee, “just doing her job” by looking out for the hospital’s business interests; the ethics of badgering an ill and vulnerable woman just out of surgery–in other words, the ethic of care–didn’t enter into the discussion.

For a few more–documented!–stories of this type, and an articulate, compelling discussion, check out “Health Care and Profits Don’t Mix” by Elizabeth Mika. (And try not to get mauled by a bear.)

These anecdotes do not argue against compensation for doctors–or any other caregivers, professional or otherwise. Rather, the point is that the motivations and incentives in relationships mediated by payment are often at odds with the motivations and incentives that we think are supposed to govern relationships defined by the term “care giving.” This is one reason many people have such a strong negative emotional response to the idea of paying stay-at-home spouses for their housework: the spouses are supposed to keep house, and possibly rear children, out of love and caring, not a desire to get paid; plus, there’s the fear that if stay-at-home spouses were paid, their emotional attachments to family members would deteriorate, replaced by a more impersonal employer-employee dynamic.

Back to Germany: Doctors certainly get paid for their services here, and seem to make a nice living. But when you walk into the reception area of their practices, you don’t see any apparatus for handling money: no credit card runners, no cash registers, nothing. All that is outsourced to firms located outside the doctors’ offices, often in different cities. Those outsource firms send a bill to your insurance firm, or–if you’re like me and have to pay every penny out of pocket–to you, the patient. Surprisingly, this doesn’t create the kind of snarled bureaucratic nightmare I would have expected: when I had questions about a bill from one of those outsource firms, I took the bill and the questions directly to my doctor, who called in his office assistant, and together they got on the phone with the billing firm and straightened things out for me on the spot.

This means that when you visit a doctor in Germany, the whole event is aligned around care from start to finish. That doesn’t make medicine a charitable undertaking, as some of the straw-man arguments in the US health care debate might lead you to think. Doctors here show no signs of having a forced choice between “doing well” and “doing good;” that distinction was also long held inviolate in the world of investing, and while the evidence has been around for over 15 years showing it to be a crock, it’s one of those snippets of economic ideology that seems impervious to reality.

Nor do patients face “rationing” of services in this system–apparently, the kinds of “socialized medicine” horror stories that Americans hear so often when we start talking about health care reform are drawn primarily from models like the NHS in Britian. Based on accounts from NHS patients, doctors and British politicians, that horror seems well-founded.

But not all “socialized medicine” is created equal, as it turns out. This came as a big surprise to me, child of the Reagan 80s, when I spent a year of high school in France and realized that a) it was being governed by the socialist party, and had been for some time, and b) people there had a much higher quality of life than most people I knew back in my suburban Chicago milieu. And nobody, ever, complained about the quality or availability of health care. So it wasn’t surprising to learn recently that independent studies by the United Nations and academic institutions (outside of France) ranked the French health care system the best in the world:

So this year [2008], two researchers at the London School of Hygiene and Tropical Medicine measured something called the “amenable mortality.” Basically, it’s a measure of deaths that could have been prevented with good health care. The researchers looked at health care in 19 industrialized nations. Again, France came in first. The United States was last.

Germany only made it to 12th on that list, but still–in nearly three years here, I have never heard a peep against the health care system, and certainly nothing remotely like the tragic litany of needless suffering (emotional and physical) and death that we hear in connection with the US system.

The French and German health care systems have another thing in common: they involve money (indeed, they are quite costly), but people living under both systems seem perfectly content to pay for the care they get, whether they do so out of pocket (like me) or through income taxes and health insurance premiums (like the majority). A big reason for that is quality: generally, people are willing to pay when they perceive they are getting value for their money. At the same time, in both systems as I’ve experienced them, the actual business of payment is kept physically separate from the provision of care.

I’m arguing that this segregation of business and care in medical services is not incidental to the subjective experience of quality and value on the part of the patient. Not having to deal with the “show me the money” issues up front, when you come to a doctor’s office or an ER in pain, makes a huge positive difference from a patient’s perspective. I hope that more Americans will get to test my claims for themselves, on home soil, rather than having to come to Europe to experience the enormous difference that such a simple change can make.

This post represents something of a departure from the usual themes of this blog, since it does not deal directly with questions of economic behavior, money or markets. However, it does address “big picture” issues in scientific inquiry, which affect all realms of sociological research. Specifically, the post builds on an analogy drawn by Wolfgang Streeck in his new book, Re-Forming Capitalism: Institutional Change in the German Political Economy (Oxford 2009). His account of epistemology in social science, and its resemblance to the advance of knowledge within evolutionary theory, struck me–to my surprise–as  a particularly compelling way to frame the contribution of qualitative research to sociology. The devaluation of qualitative sociology as “unscientific” and of dubious value compared to quantitative research has always struck me as ill-considered; Streeck’s work provided a way to articulate a response that went right to the heart of the debate. 

Early in the book, Streeck raises “the possibility of the theory of biological evolution…serving as a model for social history” (p. 11). It’s an extraordinarily fruitful idea, with wide-ranging implications. The pursuit of knowledge through data sources such as archival research, content analysis and participant observation turns out to have a surprising amount in common with evolutionary theory. Yet qualitative research faces ongoing threats to its legitimacy, even within sociology. The fallacies of these legitimacy challenges will be the subject of this post, drawing on and extending Streeck’s analogy between sociology and research on evolution.

The works of Marx and Weber, like virtually all the classic literature in the field, were based on qualitative, historical methodology (Durkheim’s quantitative study Suicide being a notable exception). As Streeck puts it,

Classical social science examined how the modern way of life had evolved out of the past…and the evolution of the emerging political-economic institutions of capitalist society.
(p. 11, emphasis in original)

Even outside the realm of these classic studies, qualitative research in sociology inevitably contains an element of the historical. In order to explain how things are, what social actors think they are doing, and what it means to them, qualitative research necessarily delves into the past, uncovering path-dependencies in structures and actions. In this way, it shares the basic perspective of evolutionary theory: privileging explanation over prediction. Yet no one questions the position of evolutionary theory as part of the broader scientific endeavor. Even creationist publications that reject evolution as “Satanic” acknowledge its status as a science by attacking its purported failures to be sufficiently scientific—for example, by claiming that “evolution is just a theory” or that “The primary scientific evidence is a pitifully small array of bones.”

In contrast, sociology occupies a far more tenuous position, often treated as a pseudo-science or a “wannabe” science particularly when it comes to qualitative work. As of 2006, 95 percent of Americans agreed that biology—of which evolutionary theory is a part—was a science, but only about half that many (49 percent) thought sociology was; a full 8 percent said they’d never heard of sociology in the first place! Making matters worse, sociologists themselves disagree as to whether their discipline is a science. Qualitative sociology has been at the center of these attacks—often devalued as “mere description,” making it indistinguishable  (in the eyes of some) from non-scientific endeavors like history and journalism. These legitimacy challenges to the status of qualitative research as part of the scientific endeavor has been growing since the “quantitative revolution”—the rise of computer-assisted calculation—swept through sociology starting in the 1950s.

Streeck’s observations about the surprising commonalties between sociology and evolutionary theory got me thinking about the liminal status of qualitative sociology. Given the many resemblances between it and evolutionary theory, the questions about the scientific status of the former seem even more ill-founded than usual. Of the many observations one could make in this connection, I was especially struck by two things:

• On Prediction and Hypothesis-Testing

  Like qualitative sociology, evolutionary theory has been subject to widespread misunderstanding about its ability to make predictions. While evolutionary theory can’t predict exactly how animals and plants will evolve, it can make predictions that guide future research, as the cases of Tiktaalik roseae and the naked mole-rat illustrate. It does this by looking backward, explaining how things came to be, then using that method to construct and validate models that can be extrapolated into the future. Sometimes, this process results in highly specific predictions—like those surrounding changes in the appearance of the Peppered Moth in Great Britain during recent decades—other times in more generalized conjectures, such as warnings about the possibility of a “mass extinction event” if global biodiversity continues to decline at its present rate.These methods of advancing knowledge have close parallels in qualitative sociology. For example, the ability of qualitative sociology to generate theory inductively, through means such as grounded theory development, is fairly well-accepted. This process includes the formulation of causal models and hypotheses, which means that qualitative research can create testable (and falsifiable) predictions—an essential characteristic in the definition of science.

However, the rigor of theory testing is often thought to be beyond the scope of qualitative research—an assumption that persists despite a multitude of peer-reviewed, published studies demonstrating the contrary.
 

• Accounting for Historicity and Change

Another important commonality between evolutionary theory and qualitative sociology is their direct engagement with historical change. Evolution is first and foremost about processes of transformation in the natural world, and qualitative sociology excels at this kind of explanation in the social realm, particularly when it comes to addressing phenomena such as the effects of repeated interactions on groups and institutions. Both domains of research recognize that there is an irreducible element of stochastic change—that is, unpredictability—over time within any complex system. And while their temporal scales are certainly different—evolution deals with change over thousands of years, while sociology rarely looks at more than a century’s worth of data—they share the basic viewpoint that history matters and that one purpose of inquiry is to explain how.

While some notable sociologists—such as Mark Granovetter, whose undergraduate degree is in history—have pointed out that sociological research can and should acknowledge the impact of “embeddedness,” regardless of the research methods employed, much of discipline has fallen into “temporal reductionism”—“treating relations and structures of relations as if they had no history.” ^[1] This is particularly strange, because as Streeck points out in his new book, explaining historical change was one of the core objectives of the emerging social sciences in the 19^th century. Yet paradoxically, in its quest to become more “scientific” in the 20^th century and beyond, the discipline modeled itself on “nineteenth-century mechanics,” resulting in the “search by much of current social science for historically universal, invariant principles governing social organization” (p. 12).Streeck does not elaborate here on the methodological consequences of this selection, but a definition of “science” as the discovery of mechanistic laws that transcend time and space would seem to exclude virtually anything but quantitative research. At the same time, this (mis)understanding of science devalues qualitative inquiry, making many sociologists “afraid of being accused of ‘atheoretical storytelling’” (p. 12). Thus sociology finds itself in the peculiar position of seeming to delegitimate its own origins.

Among the most regrettable consequences of this is the limitations it imposes on what sociology can achieve: that is, the kinds of questions it can address, and the kinds of answers it can offer. In the latter case, as Streeck points out, we are confronted with many instances of “ahistorical theory-building” (p. 12), whose explanatory power leaves much to be desired. Perhaps even more troubling, the devaluing of qualitative research has the perverse effect (for a discipline that purportedly seeks “universals”) of reducing sociology’s ability to engage with the big-picture questions of the social world—like “how did capitalism arise where and when it did?”Because evolution can address big-picture questions without having to defend its status as a science, it has made a good deal of progress on issues like the origins of life on Earth. The downside of trying to do big-picture science is that it leads into the messy terrain of complex systems: ones that combine elements of randomness with strong patterns of historicity. Acknowledging these forces is a strength of evolutionary theory, as well as of qualitative forms of sociological research—good reasons to embrace the latter as part of the social scientific endeavor.

While Streeck’s point about the links between sociological theory and evolution was incidental to his larger aims in the new book, he contributes an important insight on the puzzling status of qualitative research in contemporary sociology. The computing revolution, along with the long-standing popular view of sociology as mere common sense—a misconception that remains surprisingly robust, despite having been tackled by Max Weber nearly a century ago—have all contributed to the problem. Sociology’s ill-fated efforts to achieve scientific legitimacy by modeling itself on the physical sciences have been noted by others; but Streeck does something entirely new, suggesting that the problem is not that sociology is unscientific, but that sociologists have been modeling their work on the wrong kind of science—and an outmoded type at that!

His simple observation suggests something rather radical: instead of trying (and failing) to be like 19^th century physics, sociology would play to its own strengths and contribute more to knowledge by building on its commonalties with evolutionary theory. One way to start this paradigm shift, as I see it, is to start by recognizing the scientific value of qualitative research, based on its ability to address complex, big-picture questions, and to offer explanations that account for conflict and change—things we often miss by privileging quantitative sociology.

This year gives us occasion to celebrate two important events:

* the 200th anniversary of Darwin’s birth (12 February 1809)

* the 150th anniversary of the publication of On the Origin of Species (24 November 1859)

Happy Birthday to both!

I know what you’re thinking when you see this photo: where can I get free samples of SPAM? Where is my priceless chunk of junk? Well look no further: I’m here to help.

I have to check the contents of my SPAM filter each and every day, because one time in 20, a legit message gets routed there by mistake. As a result, I get to read the subject lines of 50 or so emails, most of which are SPAM; some of them are so hilarious that I feel the need to memorialize them somehow. Here’s the catch of the day:

uplift your sweet couch experience : does this make it more likely that I’ll find change between the cushions? because if so, count me in!

Footjobs : this is probably a sly solicitation for nude toe modeling.

A Christian Sex Cure : only steely sociological discipline prevents me from clicking on this link; I would contact Max Weber in a seance just to hear what he could make of this one….

Sax can be endless! Im not kidding! : what about the rest of the brass section? what if the flugelhorns feel self-conscious? (P.S.: thanks to the sender of this email for noting that s/he is not kidding; because otherwise, I might have thought “no way can a saxophone be endless! this can only be a Dadaist provocation.”)

Do not worry about trifles , use new debilitant! : what is this “debilitant” of which they speak? I’m hoping it’s like the “neural neutralizer” from Men in Black, because I’ve got a lot of commercial jingles and songs from 1970s AOR floating around in my brain, and the lyrics to “Get Down Tonight” need to make way for things like the difference between Type I and Type II errors:

 …I’d even settle for Buck Rogers’ “disintegrator.”

Just to add to the joy, living in Europe means that I now get SPAM in four languages: English, German, French and Italian.  To my surprise, instead of showing cultural variations in the content of their wares, they all seem to be shilling the same things: sex, drugs and academic credentials. That last one kind of surprised me, because it would seem to appeal to a very different kind of customer–the academically insecure or ambitious?–than the ones for Viagra and various potions designed to increase (selectively) the size of our appendages.

Given the sociological evidence linking educational attainment to lifetime earnings, I suppose the diploma mill SPAM should be classified under “get rich quick” schemes, along with those helpful “stock tips” that were very common a few years ago.  “Stock tip” SPAM seems to have declined precipitously in the last year, at least in my inbox, perhaps because the global market crisis means that when it comes to the stock market, everyone just wants out.

The other notable absence is the 419 or Nigerian bank scam emails. You know the ones: they usually open with an elaborately formal greeting, like “Most Esteemed Sir,” and then continue in this stilted prose–as though the writer had learned English from reading the lesser novels of Charles Dickens–to solicit “urgent help” in stashing a few million dollars in return for a percentage of the funds. This might be because all the publicity that 419 scams have received in the past five or six years has made people less likely to fall for them; or perhaps the world has just run out of fools.

Okay, perhaps that latter speculation stretches the bounds of credulity, but it is an empirical question whether there is a finite audience for these sorts of scams. Recent research is suggestive in this regard: in 2008, computer scientists from UC-Berkeley and UC-San Diego sent out a bunch of  “fake SPAM” (how postmodern is that?) purporting to offer prescription drugs online; then they simply counted the number of responses they received.

“After 26 days, and almost 350 million e-mail messages, only 28 sales resulted,” wrote the researchers.

The response rate for this campaign was less than 0.00001%. This is far below the average of 2.15% reported by legitimate direct mail organisations.

“Taken together, these conversions would have resulted in revenues of $2,731.88—a bit over $100 a day for the measurement period,” said the researchers.

Another factor in the demise of the 419 scam is the rise of “web vigilantism,” in which groups like 419 Eater and Scam-O-Rama make sport of stringing scammers along, causing them to waste loads of time and money chasing false leads. The intention is to impose costs on the senders of these scam emails, because the main economic problem with SPAM to date has been that it costs senders virtually nothing. Since they have nothing to lose, even the meagre .00001% return estimated in the UC study would be a meaningful payoff. Particularly in countries where $100/day is a princely sum–countries such as Nigeria, where per capita GDP was US$1,128 in 2007/2008, according to estimates from the United Nations.

Still, if the UC study is correct, any downward pressure on the profits from the tiny proportion of responses that SPAM emails receive might be enough to change the cost-benefit ratio for the senders. The BBC News story concluded with the following sociologically intriguing observation:

Scaling this up to the full Storm network the researchers estimate that the controllers of the vast system are netting about $7,000 (£4,430) a day or more than $2m (£1.28m) per year.

While this was a good return, said the researchers, it did suggest that spammers were not making the vast sums of money that some people have predicted in the past.

They suggest that the tight costs might also open up new avenues of attack on spammers.

The researchers concluded: “The profit margin for spam may be meagre enough that spammers must be sensitive to the details of how their campaigns are run and are economically susceptible to new defences.”

Being “sensitive to the details” might include responding to the monitoring and sanctioning being conducted by web vigilantes. Read some of the stories on 419 Eater and Scam-O-Rama to see how scammers can spend days (and presumably significant sums of cash from their perspective) travelling to and fro in search of Western Union Moneygrams that have somehow been “misrouted” or money-toting messengers who never show for their appointments.

So it appears that there is some good news about SPAM: if profit margins are already razor-thin, as the UC study suggests, it may not be that hard to wipe them out entirely. On the more pessimistic side, I suspect that combatting SPAM in this way may just turn into a giant international game of Whac-a-Mole in which, as profits associated with certain genres of SPAM (like the 419, or online diplomas) asymptotically approach zero, those genres fade away, only to replaced by new ones.

Anyone want to guess what the next years hold for us in terms of SPAM come-ons? Human organs on the DL? Lots of money to be made there, but since eBay banned organ auctions in response to a fellow who tried to sell his kidney via their website, the transactions can’t happen via the legit online markets. So they stay underground, for now. But I wouldn’t be surprised if some of the market starts to bubble up into our SPAM filters. Think of this post when you get the first “are you the guy who can’t produce urea? hre’s new liver 4 u!” email. Til then, feel free to post your predictions, or your favorite SPAM subject lines, in the comments.

Here’s the magnum opus, hot off the presses! It’s about deception–among people competing for status and resources (including money!), as well as animals. It’s about culture and warfare, along with computing and public policy.

It’s the culmination of five years of work  in which I brought together 15 leading scholars in the natural and social sciences, as well as the humanities, to compare and contrast their disciplines’ approaches to this topic. As we found, through two conferences I organized at the Santa Fe Institute (a think tank devoted to the study of complex systems and trans-disciplinary research problems), deception is not the same as lying, and it’s not always a bad thing.

After putting the workshops together, I edited the book we produced and wrote two of the chapters: the introduction, and an empirical piece on deception in financial markets (a topic that, unfortunately, just seems to get more relevant as time goes by). While I can’t post the financial markets chapter here, you can find the full text of the introduction, which sketches out each of the 15 chapters, here. The table of contents is also available online.

One of the leading contemporary economic sociologists, Professor David Stark of Columbia University, had this to say about the book:

Don’t be deceived by the deceptively simple title. These fascinating essays by biologists, psychologists, sociologists, poets, and computer scientists reveal the complexities of studying deception across historical epochs and types of interactions—from the micromechanisms of facial muscles to online communications, from photography to finance, from the false mating signals of the carnivorous firefly to the literary trickster Brer Rabbit, from deception in warfare to self-delusion. Insightful analysis, and delightful reading.

From Stewart Brand’s review:

 One of the most important forms of communication—deception—is one of the least studied, in part because it deliberately blurs itself to get its effect, in part because there are so many forms of deception they seem to defy coherent analysis. A useful approach to the problem, then, is with a collection of investigators, each with a different angle, each aware of the others’ contributions, each looking for signs of hidden structure. The result in this book, deliciously, is an introduction to the Science of Untruth.

Why is the AIG bonus scandal so shocking? Wasn’t this sort of thing bound to happen as soon as our elected representatives signed off on a no-questions-asked $700 billion bailout plan? This isn’t to defend the insurance firm’s decision to use $165 million of their $30 billion chunk of federal “assistance” to pay hefty bonuses to some of the same executives who helped destroy the firm’s finances by investing in mortgage-backed securities (bonuses that AIG claims they were contractually obligated to pay). Rather, the point is that self-dealing is predictable when large sums of cash are bestowed without accountability.¹

The surprise expressed by the most highly-placed officials in our government—I’m looking at you, Tim Geithner—rings as hollow as that expressed by the Bush administration when the market collapsed last September. It has since come to light that government officials and finance executives worldwide were on record warning of this catastrophe, and urging preventative action, well before the Fall. Assertions by the Bush administration that the economic crash caught them by surprise are as demonstrably false as their claims following another September catastrophe, seven years before, when they told us they had no inkling that terrorists were planning a massive attack on our soil. As we learned later, there was advance warning from credible sources (like FBI agents)—the Bush administration just chose to ignore it. They apparently did the same with the collapse of the financial markets.

With the AIG controversy, we’re seeing recent history repeat itself: if September’s market meltdown was a tragedy, this bonus scandal is farce. It’s reminiscent of that famous scene in Casablanca, when Captain Renault shuts down Rick’s Café for permitting gambling:

Captain Renault: I’m shocked, shocked to find that gambling is going on in here!
[a croupier hands Renault a pile of money]
Croupier: Your winnings, sir.
Captain Renault: [sotto voce] Oh, thank you very much.

What’s more, this post-bailout farce is playing out through one of the oldest and crudest tricks in the book: buying a pig in a poke. This genre of scam, in which a confidence man persuades a mark to make a risky purchase without examining the goods, goes back at least as far as the Middle Ages. When meat was scarce, gullible peasants could apparently be convinced to buy a “suckling pig” in sack (known as a “poke” in archaic English), without actually opening the sack. When they got the bag home and opened it, they found that the wriggling animal inside was actually a cat, who often ran off upon being liberated from the poke—hence the term, “the cat’s out of the bag,” meaning that a truth concealed has been exposed. As implausible as it seems, it’s so common for people to fall for this trick that phrases equivalent to the English “to buy a pig in a poke” exist in at least 25 other languages:

The main difference between our recent experience with the federal bailout and the medieval European experience with “suckling pig” purchases seems to be the price tag: we have the dubious distinction of having purchased the most expensive pig-in-a-poke in history! Going forward, this might be a good time to rediscover the concept of fair trade enshrined in Englishman Richard Hill’s Common-place Book of 1530: “When ye proffer the pigge open the poke.”

The problem is, under modern capitalism, it might not be possible to open the poke—at least in some transactions. There are two reasons for this: information asymmetry and systematic risk. The first issue is a consequence of living in complex societies with intricate divisions of labor. The specialization enforced by that kind of social structure makes it increasingly difficult to evaluate anything we buy, and increasingly necessary to take things on trust.

Consider the recent problems with melamine contamination of dairy products from China: until consumers started getting sick and dying, there was no way for anyone to know that the products were dangerous. In the context of financial markets, the Enron and WorldCom cases taught us that even the most diligent investors—the ones who read all of a firm’s financial statements, right down to the footnotes—can’t really know what they are buying. In the case of the contaminated dairy products, only the producers knew about the melamine; in the cases of financial corruption, only the corporate executives knew they were “cooking the books.” Like the medieval con artists selling bags of wriggling cats as “suckling pig,” the sellers withheld crucial information from buyers, and exploited the information asymmetry for profit.

But unlike the hungry “pig” buyers who could have opened the pokes to check the merchandise, there was no way for the buyers in these contemporary cases to know what they were really getting. They just had to make the purchases on faith, a faith placed in part in institutions to whom we have delegated the monitoring and sanctioning functions on which trust is based. Those institutions failed us—how they did so is the subject for another post, but the larger theme here is that part of what we’re seeing in the “bailout fallout” is a consequence of the buyers (the taxpayers who are footing the bill) being structurally unable to overcome the problems of information asymmetry.

The second problem, systematic risk, is the intrinsic risk underpinning any transaction, from a simple barter exchange to investing in complex financial instruments. This is the kind of risk that remains no matter how much information one has, how much insurance one buys, or how much one diversifies. Imagine you need change for a coin-operated washing machine, and you call your next-door-neighbor to see if she can give you four quarters in exchange for a dollar bill. What could be more transparent? You know your neighbor, the currency is standardized, and you have no reason to expect that she might be counterfeiting 25-cent pieces. But there are still many ways the transaction could fail, for reasons you could not foresee: for example, as you’re walking across the street to make the exchange, your neighbor drops dead of a heart attack brought on by an undiagnosed arrhythmia. That’s a systematic risk—in the broadest sense, it’s the risk we take by assuming that we and our transaction partners will live to fulfill our agreements with one another. In the financial world, systematic risk could come in the form of an outbreak of war or a pandemic, or what are often termed “acts of God” in the fine print of insurance contracts.

As a result of both systematic risk and information asymmetry, both of which are inherent in economic life, we end up buying pigs-in-pokes, faute de mieux. There is nothing else to buy. Capitalist development has colonized the life-world so completely that even if one was able to withdraw from social life and stop making transactions with others—living in isolation, off the grid, providing for all one’s own needs—these risks are still unavoidable. You might find that the plot of land where you grow your food was poisoned by a previous owner who used synthetic pesticides or stored toxic substances underground; if you’re lucky enough to avoid that hazard, you could still be wiped out by anything from a roving grizzly bear to a nuclear strike. These things are not in our control.

Yet we still get up every day and buy more of those wriggling sacks, hoping that whatever eventually jumps out resembles what we thought we were buying. From this perspective, the bailout, like the case of Long Term Capital Management a decade before—that was the hedge fund that demanded that investors fork over a minimum of $10 million, with no questions asked about the fund’s plans or investment strategy—is just an extreme case of “normal” everyday practices in which we all engage within complex capitalist societies. This is simultaneously reassuring and terrifying, because it suggests that the global economic crisis is not an anomaly, but literally the new business as usual. Unfortunately this means that, as with “extreme weather events” like Hurricanes Katrina and Gustav, we can expect more of the same in the years to come.

Lacking any words of optimism or consolation, I can only offer some distraction: the sweet revenge of the poked pig.

UPDATE: For an absolutely hilarious mash-up of classical and contemporary drama (Aeschylus meets AIG), check out Kieran Healy’s send-up of Agamemnon.

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 1. The whole deal is rather galling to those of who can’t get paltry sums from the federal grant-making agencies without a detailed proposal up front, and expense and status reports afterwards to keep us accountable.